Japan in Their Own Words (JITOW)/日本からの意見

Reaffirming the High Road of Capitalism and Democracy – Japan's Responsibility as the Chair of the Next G7 Summit Meeting
KAWATO Akio / Japan’s Former Ambassador to Uzbekistan and Tajikistan

July 15, 2015
In early July, the BRICS summit and a meeting of leaders of the Shanghai Cooperation Organization were held in Ufa, Russia. The advent of a "multipolar world" and "the era of BRICS" have been much trumpeted since the financial crisis in 2008, but with the exception of India, the BRICS countries have seen their growth rates fall in recent years. Meanwhile, the industrialized countries are poised for a new economic growth, having overcome the turbulence after the financial crisis in 2008.
It is against this backdrop that Japan will chair the G7 summit meeting next year. Discussions on the agenda will begin any time now. Japan should make the most of this opportunity as the coordinator of this major event.

These days, the summit agendas have become mediocre or immaterial; they fail to excite. Yet, the world today is at a major crossroads, in terms of both politics and the economy. Summit participants must seek out common ground on basic issues to determine the future direction of the world and redefine the role played by developed countries in such a world.

We should start by reassessing our approach to the skepticism with which capitalism has been regarded since the global financial crisis of 2008, doubts about the viability of the market economy caused by the rise of China, whose economy is centered on state enterprises, and the critical state of democracy in developed countries, where governance has declined along with social diversification and economic stagnation.

The global financial crisis placed the spotlight on the G20 and BRICS as the new lead players of the global economy. However, the G20 is too numerous and tends toward internal conflict between the developed nations and the BRICS, making decision-making difficult. Apart from India, which has done fairly well, the economies of the BRICS countries have clearly reached a standstill, due to structural problems inherent in the economy and society of these countries, such as excessive intervention by the state or political parties and corruption.

Meanwhile, the old lineup of "capitalist developed nations" still possess the seeds of economic growth – namely, the capital, technology and management know-how. Global direct investment reached US$1.45 trillion in 2013, with companies in developed countries accounting for 61%. While their share may have fallen from 75% in 2007, quality investments accompanied by the transfer of technology and management know-how remain the exclusive territory of companies in developed countries.

Among Chinese companies, textile and garment firms, along with electric appliance maker Haier and ICT provider Huawei, have been bolstering overseas production. Yet, companies from developed countries still dominate in areas of advanced technology. iPad may be assembled in China, but the breakdown of its price tag is structured so that only 2% of it is doled out to Chinese workers, while the rest goes to Apple's head office and to paying components manufacturers and outsourcing logistics companies in countries such as South Korea, Japan and Taiwan

Next, we should discard any doubts about state-controlled economies such as those of China or Russia having an advantage over market economies. While it is widely known that Russia's economic growth was brought about by surging oil prices, the Chinese economy, often hailed as a "miracle," is still dependent on foreign companies for 50% of its exports. Direct investment from abroad and the trade surplus generated by such investment has continued to exceed $400 billion each year, and is further inflated by infrastructure investment to orchestrate the country's "rapid growth." In other words, Russia and China have not achieved growth because they manage a state-controlled economy, but have done so despite that fact, thanks to the windfall from external factors.

On the other hand, the market economy and democracy model of developed countries is also saddled with structural problems. Wealth is unevenly distributed and the income gap is remarkably wide – most prominently in the United States, and this has hampered further growth in consumption. The United States, Europe and Japan have all sought to stimulate their economies through excessive monetary easing, but this may lead to another burst of the bubble that could take down the global economy with it.

There is another problem. Developed countries have come under pressure to implement significant reforms on their system of representative democracy based on political parties, as their societies become more diversified and their citizens want to have their opinions directly adopted by the government without intermediaries.
Meanwhile, the condescending attitude with which developed countries have sought to force democracy onto developing countries tends to cause confusion without breaking down the longstanding structure of vested interests in those countries. Democracy cannot be realized without economic development and creation of sound middle class.

These would be all issues to be discussed not only at the summit meetings of major countries but also by other organizations with more participating countries, such as the OECD.

Next year's summit meeting will be the last for U.S. President Barack Obama, but there is still time left for the leaders of Japan, Germany, the United Kingdom and France. They can afford to discuss the issues at length. And if they succeed in getting the Ukraine situation under control, bringing Russia back into the fold will also be on the agenda. As a general rule, Japan holds general elections during the same year as it chairs a summit meeting, so this would be an excellent opportunity for Prime Minister Abe Shinzo to demonstrate his competence.

Akio Kawato is Japan’s former Ambassador to Uzbekistan and Tajikistan. A partially edited version of this article was published by the Japanese edition of Newsweek on June 16, 2015..
The English-Speaking Union of Japan

資本主義・民主主義の王道を確認せよ ――次期主要国首脳会議議長としての日本の責務――
河東哲夫 / 元駐ウズベキスタン大使兼駐タジキスタン大使   

2015年 7月 15日





 中国企業は繊維・縫製、あるいは電機のHAIER、通信のHUAWEIなどが海外生産を増やしているが、先端技術の分野はまだ先進国企業の独壇場である。iPadは中国で組み立てられているが、その販売価格500ドルのうち、中国の労働者が得る分は僅か8ドル、その他はアップル本社、韓国、台湾、日本等の部品企業、流通業等が得るという構造になっている 。






(筆者は元駐ウズベキスタン大使兼駐タジキスタン大使 本稿の一部修正したものがニューズウィーク日本版6月16日号に掲載された。)
一般社団法人 日本英語交流連盟

English Speaking Union of Japan > Japan in Their Own Words (JITOW) > Reaffirming the High Road of Capitalism and Democracy – Japan's Responsibility as the Chair of the Next G7 Summit Meeting